In a Network World article by Dave Webb,Bell Canada’s chief of regulatory affairs Mirko Bibic attempts tojustify the throttling of the last-mile connection to independent ISPs.As is typical, Bell Canada is abusing peoples confusion between issues around the last mile natural monopoly and Net Neutrality.I increasingly believe that if people continue to confuse these tworelated but separate issues, Bell Canada and other incumbent phone andcable companies will win this critical debate.

I strongly agree with Network Neutrality. I am, however, one ofthose who believe that market forces within a competitive marketplacewill be better able to ensure this neutrality than governmentregulation of TCP/IP based services. In order for this to be possiblewe need to have a competitive marketplace where those of us thatrecognize the need to hire ISPs that provide us services based on the End-to-end design principle are able to do so. We will then continue to educate other people about this need as well.

There are times when congestion exists on the Internet (sometimeslegitimate, and sometimes not), and customers should be able to hire anISP that best matches their own beliefs in how to handle thiscongestion. While I believe that the government should mandatedisclosure of routing policies by ISPs, I believe that regulating “NetNeutrality” directly may backfire.

This is an entirely different question than the fact that existingregulation of the “last mile” monopoly must be enforced andstrengthened. There will always be a “last mile” monopoly fortelecommunications for the same reason there is for roads: it makes nomore sense for every telecommunications provider to run separate wiresinto our homes than for every retailer to run separate roads to ourhomes.

Bell Canada as a company operates in many different markets, andoffers a number of different services. In each of these markets theyare regulated (or not) in different ways. With Bell ExpressVu they area cable company, regulated as a “broadcast undertaking” just likeStarChoice, and very similar to Rogers when acting as a cable company.They are also a wireless cell carrier, and a ILEC (Incumbent LocalExchange Carrier) offering a variety of telecommunications services.They own Telesat Canada, and an interest in CTVglobemedia.

Bell Canada also offers Internet Service Provider (ISP), includingthrough the Sympatico brand. In this case they are using the same “lastmile” infrastructure as any other competing ISP, allowing customers toconnect point-to-point to their routers. After that point it is an“Internet” service where they offer transit (connections between theirInternet routers and those of other ISPs locally and beyond) and othercompeting Internet-related services (email storage/delivery, Websitehosting, DNS, etc).

In most of these marketplaces they operate as a regular privatesector company, regulated just like any other competitor in that samemarketplace.

There is one of their services where they are different and that isin the provision of physical wiring to our homes. This is a servicewhere Bell was given privileged “right of way” access by various levelsof government to place cabling (copper, fiber, etc) below and abovepublic and private land. Bell could never offer this service withoutgovernment intervention, and the superior property right is the publicand private property that the cables run below and above — not thecabling.

Bell was given a number of requirements in exchange for thisprivileged government intervention. Historically the most oftendiscussed was rural access, where Bell was mandated to offer phoneservices to rural locations — even at what might otherwise have been aloss, except for the fact that they were given practically guaranteedprofits in other markets by the government, as well as massivegovernment subsidies over the years. More recently the conditiondiscusses more often is competitive access to the facilities which thepublic sector made possible (through right of way and subsidies) toallow services built upon this last mile to be provided by acompetitive private sector.

I will state what seems to be the core of the confusion: when itcomes to this last mile wiring below and above our property, theservice that Bell Canada manages can no more be considered privately“owned” by Bell than Canada Post can be considered private. While theideal would have been if this specific service had been separated byBell Canada and operated as a proper crown corporation, we can’t goback in time and fix this problem.

We do have a number of ways to move forward from here. Some suggestthat adequate enforcement of competitive access is sufficient. While Imight have been convinced in the past, the claims by Bell Canada thattheir throttling of competitive access circuits is somehow related toP2P Internet traffic suggests that this alone is not going to work.

The type of management that Bell is trying to justify is notlegitimately considered Internet traffic at all. In fact they may beviolating both the terms of the regulated service as well as federalprivacy legislation to inspect the packets within these point-to-pointcommunications to the level to even detect if they contain TCP/IPpackets. There is also no legitimacy to their being congestion on thesecircuits, unless it is temporary due to damage within the network. Thespeed of the connection between the customer and the ISP (and Bell is*NOT* an ISP in this transaction) is part of the regulation.

Given Bell can’t be trusted to live up to their end of the bargainwith governments, it may be time to take back these services from Belland allow the remaining company to operate the way Bell seems to wantto operate. The louder Bell tries to justify their questionably legalactivity, the more we need to push to take from the table the option ofbell violating their end of the bargain and getting away with it.

We can give Bell a simple choice.

One option would be for this last mile infrastructure to be spun offinto a separate company that would then become a crown corporation.Bell can even be given a contract to manage the services of thiscompany for a 10 year period, after which it would be open tocompetition or to employees of this new crown corporation. With aseparate corporate structure, Bell Canada would clearly no longer beable to allege that they “own” this infrastructure, or claim they canmanage it any way they see fit.

Another option would be to allow Bell to retain ownership of thisinfrastructure, as long as they paid a rental fee at a fair price forthe right of way, as well as returning any government subsidies —including interest over the last 50 years. We would be fair and onlybackdate this for 50 years, even though they have received privilegesfor far longer. It would be clarified that the Crown Corporation wouldstill be created, and while historical right-of-way would begrandfathered, it would be this new Crown Corporation that would ownany new last-mile infrastructure.

Given these options I believe Bell will choose the first, given Idoubt even Bell with their guaranteed profits over the years couldafford to pay back the various handouts from the public purse they havereceived. At that point we would have a competitive marketplace betweencompeting phone and Internet access companies able to operate on equalfooting, each able to build out their own networks using the (mandatorydisclosed) policies of their choice. Customers can then read the publicreports of these management choices, and hire the phone and Internetaccess company of their choosing.

Note: As part of the other work I do I look for electronic versionsof older government documents (Bills and summaries, statutes, etc).While the 1987 version of the Bell Canada Actis online, earlier versions are not. It would be interesting to haveadequate online references for the history of Canadiantelecommunications, given how quickly people forget and then believethe “we own it, and we can do what we want with it” rhetoric from thephone and cable companies.

P.S. I participated in IT360 last week, and will BLOG about thatlater in the week. It just seems like questions around throttling andNet Neutrality are extremely hot at the moment (See ITWorldCanada’s Net Neutrality Resource Centre).